Question

Lubricants, Inc., produces a special kind of grease that is widely used by race car drivers. The grease is produced in two processing departments-Refining and Blending. Raw materials are introduced at various points in the Refining Department. The following incomplete Work in Process account is available for the Refining Department for March: March 1 balance ? Materials Direct labor Overhead March 31 balance Work in Process-Refining Department 31,300 Completed and transferred to Blending 154,600 70,200 477,000 ? The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,000; direct labor, $3,200; and overhead, $21,100. Costs incurred during March in the Blending Department were: materials used, $46,000; direct labor, $16,900; and overhead cost applied to production, $116,000.

Answer 1

Ans.1

Transactions	General Journal	Debit ($)	Credit($)
A.	WIP - Refining Department	154,600
	WIP- Blending Department	46,000
	To Raw Materials		200,600
B.	WIP- Refining Dept.	70,200
	WIP- Blending Dept.	16,900
	To Salaries $ Wages Payable		87,100
C.	Manufacturing Overhead	706,000
	To Accounts Payable		706,000
D-1	WIP- Refining Dept.	477,000
	To Manufacturing Overhead		477,000
D-2	WIP- Blending Dept.	116,000
	Manufacturing overhead		116,000
E.	WIP- Blending Dept.	682,000
	To WIP- Refining Dept.		682,000
F.	Finished Goods	780,000
	To WIP- Blending Dept.		780,000
G-1	Accounts Receivable	1 ,480,000
	To Sales		1,480,000
G-2	Cost of Goods Sold	610,000
	To Finished Goods		610,000

Ans.2

Accounts Receivable

Beg. Bal.
(G)	1,480,000
		End. Bal	1,480,000

Raw Materials

Beg. Bal.	205,600
		(A)	200,600
End. Bal.	5,000

WIP- Refining Department

Beg. Bal.	31,300
(A)	154,600
(B)	70,200	(E)	682,000
(D-1)	477,000
		End. Bal.	51,100

WIP- Blending Department

Beg. Bal	50,000
(A)	46,000
(B)	16,900
(D-2)	116,000	(F)	780,000
(E)	682,000
		End. Bal.	130,900

Finished Goods

Beg. Bal.	20,000
(F)	780,000	(G-2)	610,000
		End. Bal.	190,000

Manufacturing Overhead

Beg. Bal	0
(C)	706,000	(D-1)	477,000
		(D-1)	116,000
		End. Bal.	113,000

Accounts Payable

Beg. Bal	0	(C)	706,000
End. Bal.	706,000

Salaries & Wages Payables

Beg. Bal	0	(B)	87,100
End. Bal.	87,100

Sales

Beg. Bal	0	(G-1)	1,480,000
End. Bal.	1,480,000

Cost of Goods Sold

Beg, Bal.	0
(G-2)	680,000	End. Bal.	680,000

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